Small businesses applying for federal loans to recover from Hurricane Sandy are caught in a storm of red tape

A small business owner works on laptop to apply for a federal loan to repair damage from Hurricane Sandy. Photo Levi Sharpe

Small business owners still suffering after Hurricane Sandy are drowning in paperwork, trying to tap into the city’s disaster recovery loans pool.

“It’s an exhaustive, onerous process,” said Red Hook restaurant owner Monica Byrne, who co-founded a coalition that has raised about $600,000 for businesses hurt by the storm.

“There’s such a lack of understanding of the experience of who’s really in need,” she said.

Dozens in the city who own micro-businesses — or operations with six or fewer employees — say they’re struggling to apply for the Hurricane Sandy Business Loan & Grant Program.

The federally funded disaster relief program, launched in August 2013, expanded in July to offer $100,000 grants and up to $1.1 million in matching grants.

But some say they don’t have the resources to run an operation while plowing through a daunting and complex application process, which includes a 140-page book that outlines the best way to submit for funding.

Business owners also argue that some requirements, such as showing receipts or photos for lost or damaged items, don’t take into account that such documents may have been swept away during the storm.

“Trying to do that and do business at the same time, there’s just not enough time in the day,” said Red Hook’s NY Printing & Graphics owner Susan Saunders.

Her company’s headquarters was flooded by 5½ feet of water during Sandy, causing $400,000 in damages.

“I’m just so worried,” Saunders said.

“By the time I get all of my paperwork in, they’re going to turn around and say there’s no more funds left.”

The city Department of Small Business Services, which created the program, offers “technical assistance to help people navigate through applications," agency spokeswoman Lulu Mickelson said.

"Remote field offices are available in hard-hit areas, and account managers are there to walk business owners through the application process," she added. "The city can also help businesses create the financial documents required for the application that may have been lost in the storm or may never have existed."

The city has approved 100 businesses so far for a total of more than $15 million in grants and loans, Mickelson said, noting that nearly 70% of those approved have six employees or fewer.

But help can’t come soon enough for George Kornienko, who owns Rocky Sullivan’s.

The pub near the Red Hook waterfront was still recovering from Hurricane Irene when it was slammed by Sandy.

“We’re not necessarily looking for a handout,” Kornienko said, “just a hand up.”